Judge compels arbitration in consumer’s lawsuit against Ticketmaster

A federal judge dismissed a lawsuit accusing Ticketmaster LLC of conspiring with scalpers to "cash in twice" on ticket sales and sent the dispute to arbitration.

U.S. District Judge Vince Chhabria of the Northern District wrote the ticket sales company's terms of use "clearly and unmistakably" send the plaintiff's claims to an arbitrator.

The plaintiff established "only a minimal degree of procedural unconscionability," the judge wrote in his order to compel arbitration issued last week.

David Levine, a UC Hastings College of the Law professor, said he was not surprised by the outcome, considering the bar to establish unconscionability in a company's terms of use policy is "pretty high."

"The bottom line is that it needs to be conspicuous enough," he said. "The courts have been aggressively enforcing arbitration."

Plaintiff Allen Lee argued Ticketmaster colludes with scalpers, who allegedly use "bots to scoop up huge numbers of tickets to resell at much-inflated prices," to get a second cut of the ticket sales. Lee v. Ticketmaster, 18-CV5987 (N.D. Cal., filed Sept. 28, 2018).

The lawsuit sought class action status and more than $5 million in damages.

Defense attorney Daniel M. Wall of Latham & Watkins LLP -- who represents Live Nation Entertainment Inc., Ticketmaster's parent company -- declined to comment. Plaintiff's attorney Steve W. Berman and Elaine T. Byszewski, both with Hagens Berman Sobol Shapiro LLP, did not immediately return requests for comment.

Attorneys for Ticketmaster argued users agree to the company's arbitration provisions, which should be applicable to Lee's claims.

But plaintiff's attorneys said Lee could not have surrendered his litigation rights because Ticketmaster's terms did not include an arbitration clause when he first registered, and the company never notified users when the terms were changed.

Chhabria disagreed.

The plaintiff agreed to the company's terms whenever he placed an order for tickets. Although he was not required to check a separate box indicating his assent, Ticketmaster provided notice of the terms next to the "place order" button, according to the judge's order.

The arbitrator could rule the plaintiff's argument that his purchase of tickets on the company's resale websites is not covered by arbitration provisions he agreed to when buying tickets on its primary sales website belong in court, Chhabria added.

In a 2016 order going the other way, Spotify lost a bid to compel arbitration in a case alleging the music streaming company violated state laws by automatically renewing users' subscriptions.

U.S. District Judge William Alsup of the Northern District ruled several of the "substantively unconscionable provisions" that form the arbitration provisions render it unenforceable.